BETHESDA,
Md.-September 29, 2010 - Pebblebrook Hotel Trust (NYSE: PEB) (the “Company”)
today announced that it has acquired The Grand Hotel Minneapolis for $33.0
million. The 140-room, AAA four-diamond, upper-upscale, full-service hotel,
featuring the 58,000-square foot Life Time Athletic Club and Life Spa,
is located in the heart of downtown Minneapolis. The hotel will be managed
by Kimpton Hotels and Restaurants (“Kimpton”). The transaction was funded
entirely with available cash.

“We are excited about the acquisition of one of Minneapolis’ most iconic
and historic hotels,” said Jon Bortz, Chairman, President and Chief Executive
Officer of Pebblebrook Hotel Trust. “We view the acquisition of The Grand
Hotel Minneapolis as a unique opportunity to invest in a distinguished
and high-quality hotel with a rich and celebrated heritage that is able
to offer one-of-a-kind amenities in a superior location.”

The Grand Hotel Minneapolis is located in the central business district
of downtown Minneapolis. The hotel links directly to the Minneapolis Skyway
System, a climate-controlled pedestrian walkway, which connects the property
to key entertainment, retail, convention and office locations in the downtown
area. The Minneapolis Skyway System is over seven miles in length and connects
69 city blocks in the downtown area. In addition to the Skyway connection,
the hotel is connected to the 225 South Sixth building, a trophy 53-story,
1.4-million square foot office tower and is also connected underground
to the Northstar Center, a 813,000-square foot office building. Both buildings
have a diverse array of tenants that provide a strong corporate demand
base.

The hotel is in close proximity to many of the city’s key demand generators,
including the Financial District, the Mall of America, Walker Art Center,
the Metrodome, Target Field, the Minneapolis Convention Center and the
Riverfront District. The cultural, dining and entertainment options, coupled
with over 6,800 businesses and a high density of major Fortune 500 companies
in the Minneapolis-St. Paul metro statistical area, provides The Grand
Hotel Minneapolis with a high-demand and diverse guest mix of leisure,
corporate and convention travelers.

The Grand Hotel Minneapolis, a 14-story building situated in downtown
Minneapolis at 2nd Avenue and 6th Street, was originally opened in 1912
as the famed Minneapolis Athletic Club. From 1999 through 2001, the property
underwent a conversion totaling approximately $50 million to what is now
The Grand Hotel Minneapolis. In conjunction with the hotel and its notable
history, the property houses the 58,000-square foot Life Time Athletic
Club and Life Spa and Zahtar, a three-meal-a-day restaurant that features
modern American cuisine with Mediterranean flair.

The hotel features 140 traditionally appointed guest rooms, including
21 suites and an expansive 3,500-square foot Presidential Suite. The property
has over 6,500-square feet of flexible meeting space, including one of
the largest luxury ballrooms in the downtown area. Additionally, The Grand
Hotel Minneapolis features The Grand Finale Lounge, 24-hour room service,
valet parking and a full-service business center.

The Grand Hotel Minneapolis is an institution within the Minneapolis
market. In 2009, the hotel operated at approximately 61% occupancy, with
an average daily rate of approximately $176. During the next 12 months,
the Company currently forecasts that the hotel will generate earnings before
interest, taxes, depreciation and amortization (“EBITDA”) of approximately
$2.3 to $2.8 million and net operating income after capital reserves of
approximately $2.0 to $2.5 million. The Company plans to invest approximately
$4.5 million over the next 12 to 24 months in a refurbishment of guest
rooms, the lobby and other various public area improvements.
The Company selected Kimpton Hotels and Restaurants as manager for
The Grand Hotel Minneapolis. Kimpton also manages two of the Company’s
other hotels: the Sir Francis Drake Hotel in San Francisco and the Monaco
Washington DC.

“We are thrilled to be able to bring Kimpton in to manage this unique
hotel,” continued Mr. Bortz. “Kimpton has a tremendous track record of
operating boutique hotels, especially hotels that are historically significant
to their communities. Kimpton’s comprehensive and thoughtful approaches
to marketing and the guest experience, combined with a national corporate
and group customer platform, are expected to yield immediate benefits for
the hotel.”

“We are continuously looking for new and exciting management opportunities
like The Grand Hotel Minneapolis,” said Michael Depatie, CEO of Kimpton
Hotels and Restaurants. “This is an incredible opportunity to grow our
relationship with Pebblebrook Hotel Trust, and to bring our proven industry
experience to the Minneapolis market for the first time. We look forward
to future success at The Grand Hotel Minneapolis as well as with Pebblebrook.”

The Life Time Athletic Club and Life Spa and Zahtar restaurant are leased
and operated by Life Time Fitness (NYSE: LTM) and have a lease term through
June 2019.

The Company expects to incur approximately $0.3 million of costs related
to the acquisition of this hotel that will be expensed as incurred.

The Grand Hotel Minneapolis marks the fifth acquisition for the Company
since completing its initial public offering in December 2009.

About Pebblebrook Hotel TrustPebblebrook Hotel Trust is a publicly traded real estate investment
trust (“REIT”) organized to opportunistically acquire and invest primarily
in upper-upscale, full-service hotels located in large urban and resort
markets with an emphasis on the major coastal cities. The company owns
five hotels, with a total of 1,430 guest rooms. http://www.pebblebrookhotels.com/

About Kimpton Hotels and RestaurantsPrivately held, San Francisco-based Kimpton Hotels and Restaurants,
a collection of boutique hotels and chef-driven restaurants in the US,
is an acknowledged industry pioneer and was the first to bring the boutique
hotel concept to America. Founded in 1981 by Bill Kimpton, the company
is well-known for making travelers feel welcomed and comfortable while
away from home through intuitive and unscripted customer care, stylish
ambience and having a certain playfulness in its approach to programs and
amenities. Each hotel provides a range of exciting culinary experiences
through locally-loved, top-rated, destination, chef-driven restaurants.
Kimpton leads the hospitality industry in ecological practices through
its innovative EarthCare program that spans all of the hotels and restaurants
Kimpton manages.

About Life Time Fitness, Inc.Life Time Fitness, Inc. (NYSE: LTM) is a healthy way of life company
based in Chanhassen, Minnesota. The Company is dedicated to providing programs
and services that help its members connect and engage with their areas
of interest, and achieve success with their health and fitness goals. Life
Time Fitness designs and operates distinctive, multi-use sports, professional
fitness, family recreation and spa/resort centers that help members lead
healthy and active lives. As of September 28, 2010, the Company operated
90 centers in 19 states and 24 markets. Additional information about Life
Time Fitness centers, programs and services is available at lifetimefitness.com.